Many divorce clients (or prospective divorce clients) who are already separated ask how/if their date of separation can impact the division of their assets. If a couple has been living separately for 1 year, 5 years, or even 10+ years, will the court really divide the assets as of their value on the date of divorce? Is this fair? Is it possible to go back in time and divide the assets based on their value at the time of separation?

The answer to that question is – maybe. The question hinges on how the couple lived during the period of their separation. Did the couple live separately both physically and financially? Or did the couple separate physically, but continue to rely on each other financially and make joint decisions?

This was among the issues involved in a recent Michigan Court of Appeals decision. In Haig v. Haig, the couple separated in 2013, but did not file for divorce until 2018. In the five years the couple lived separately, they continued to jointly pay their health insurance, car insurance, children’s expenses and cell phones, but otherwise the couple were completely financially independent of one another, including each spouse paying their own mortgage payment.

As a result, the trial court chose to divide the marital home based on its value in 2014 (near the date of separation), rather than the 2018 value (the year of the divorce). The wife in that case disputed the court’s decision to use a 2014 value, arguing that the house value increased substantially between 2014 and 2018.

On appeal, the Court of Appeals agreed with the trial court’s decision to use the 2014 value for the home and affirmed the lower court’s decision. The Court of Appeals found that the trial court properly considered the couple’s “manifestations of intent to lead separate lives” as critical in reaching its conclusion. In other words, if you live separately, and lead separate lives financially, the court can properly look at the date of separation in dividing the assets, rather than the date of divorce.

This case reaffirms the premise that separation, coupled with manifestations of intent to lead separate lives, can result in a court deciding that assets accumulated during separation, or the increase in the value of existing assets during separation, can be allocated disproportionately to one spouse in a subsequent divorce.

If you or someone you know has been separated and is contemplating divorce, this issue and the Haig case may be of significance. For more questions or information, please contact us at (248) 290-0515 or visit www.chryssikoslaw.com